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Minister Warns Overheating of Real Estate Sector
Construction Minister Wang Guangtao warned Friday that the real estate market is over-heated in some parts of the mainland, but the general situation is still good.

Statistics show that real estate investment nationwide between January and May grew by 36.7 percent over the same period last year.

In comparison, real estate investment grew by 19 percent in all of 2000 and 29 percent between January and November of last year.

Real estate investment in the year's first five months stood at 209.8 billion yuan (US$25.37 billion).

Wang attributed the staggering growth rate to over-heated investment in some regions.

But on the whole, he said, the real estate industry on the mainland has developed at a healthy rate.

Real estate investment is one of the most important economic indicators to describe whether an economy is healthy in a certain time of period.

Wang also highlighted achievements and upcoming measures in his remarks so as to maintain order in the building sector.

Wang described the building market in some regions as "somewhat chaotic'' now due to regional protectionism, monopolies, under-the-counter deals and defiance of laws.

"It is necessary and urgent for us to continue the campaign to regulate and supervise the market,'' Wang said.

His ministry will continue to improve the bidding process, which he said should be placed under public supervision.

Wang said designing, planning and construction authorities, companies and other intermediary agencies at all levels have been motivated to participate in the battles against irregularities in the building market.

Wang said the endeavor is an important part of the central government's market-rectification effort, which began the middle of last year.

The State Council has already made public lists of regulations to standardize rules in the market and ensure production safety in workplaces, Wang said.

"Those regulations and construction laws are the weapons to curb the irregularities,'' Wang said.

Irregularities and illegalities by administrative and legal staff are at the top of the list of things to be corrected in this campaign, he said.

Wang maintained that public bidding for construction contracts is needed to fostering fair competition among firms in the building sector. It also controls costs and guarantees the quality of projects.

"But unfortunately, in recent years, the public bidding has been undermined by some local governments, design agencies and developers,'' Wang said.

As a result, the building market remains somewhat uncontrolled, he said.

Companies have pressured officials to turn public bidding into invitation-only bidding, he said. In some cases, they have secretly worked to place their own people in a position to determine the outcome of a bid, he said.

According to construction laws and regulations, all departments must strengthen enforcement of bidding laws and stop such illegal activities.

(China Daily July 6, 2002)

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